In Conversation With … IORMA Board Member: Mick Yates

in conversation with

Mick Yates runs a consultancy in marketing and retailing, specifically in the application of the important subject of Big Data. He is a visiting Professor at University of Leeds Business School, teaching the leadership challenges presented by Big Data and Social Media. As IORMA focuses increasingly on the spending power of the global consumer, Mick’s presence on IORMA’s board is important.

For 7 years he worked at dunnhumby which mentors companies in building a customer focused operation using insights from big data. In addition to a in impressive portfolio of non-profit projects, Mick has been a Director on JV Boards and worked across all continents and is a veteran of Johnson and Johnson Consumer in Asia-Pacific, Procter and Gamble and of Max Factor Japan.

Given this wealth of experience to draw upon, I asked Mick to share his insights on the future of the global consumer.

PML: You cite your passions as respect for customers… how should businesses show true respect in order to retain customers?MY: Let me explain where the idea for respect for customers came from. When I was a brand manager in the 70’s I was taught by P&G that the customer should be at the centre of what we were doing. We would listen to what the customer wanted and try to provide this. However we would in many ways push marketing (in a respectful way) at them. We were pushing advertising, we were pushing television, samples, promotions, and it was a one way street with no way for the customer to properly talk back to us lodge a complaint. Today the customer is deciding what they want; they are looking online, reading reviews asking their friends. So the customer is pulling things to themselves, and it is not possible for us to push products onto them anymore. So today when we say ‘respect consumers’, we mean making sure they feel engaged, respected. And as business is trying to understand what the customer wants, the dialog between customer and brand is fully enabled (both ways) by today’s technology.

PML: Do you think it is easier for a consumer to contact a business, for example businesses having only an 0845 number with nobody answering, or on the website, the contact details have endless FAQs and you can’t find an email address to write to? I feel they are not so better served in the new age, can you comment on that at all?MY: I completely agree with that as would most of the population. There is a massive confusion between so called CRM systems and proper customer engagement. CRM systems are too often the press once press twice automated systems we dislike, they are a tracking system. A smart brand will have a conversation with their customers through social media, witness Heathrow airport. And we need to differentiate between CRM and engagement, and in the digital age this is possible, and only recently. But I agree that not enough companies are moving into this proper engagement of customer through digital media.

PML: Similarly, when you’ve had a buying experience and you receive some form of SMS contact asking “how would you rate this service?” Do you think there is a possibility of this technology moving further on so that customers can actually reach someone rather than an admin department?MY: Yes there is, and it is certainly possible. But from the company’s point of view it’s quite complicated, as you can’t have someone on the line all the time. You are more likely to get that on social media outlets because it is possible to monitor a twitter feed. For example if you tweet about a bad service on a particular airline, you would expect a response…the power of the hash tag. But I think it’s a bit unrealistic to always expect a human being on the other end of the phone, except in one situation, finance. I have never really understood why the finance industry doesn’t put more into a system that allows the consumer to talk to a real person, nothing is more frustrating than having a credit card declined in Australia and having to go through forty minutes of tracking systems to get a real person. So I think that this should be the exception.

PML: What have you learned from companies such as J&J, P&G in the way they serve the global consumer?MY: One lesson that I learnt was that in some ways we are more the same than we are different. Having a product built to the highest possible standard is key. Let me tell you a story about that. Many years ago I was involved in introducing a concentrated detergent into India. India has the biggest bar soap market and women would spend hours scrubbing clothes, but with this soaking detergent product you could leave the laundry for an hour to soak and then it’s done, so it’s a lot simpler to use. But we made a massive error. Whilst we priced it so that it was same cost per wash, the bar of soap was 1 Rupee and our detergent was 35 Rupees, so the cash outlay for someone with little money was too high. We sampled the product, but only with the richer people instead of the poorer people who would benefit more from the product. As I was walking down a street in India, looking at the richer area we were sampling, a lady from a shanty town next to me asked to talk to me, she said she had seen our television advert. She said “if it’s true and it is the same price as the bar soap I use now and saves me hours of work, I would be interested in this product, but I can’t afford to pay 35 Rupees, so why didn’t you sample me?”

So my learning point; if it is a really good product it is going to be appreciated by all people and cultures.

PML: Did you manage to make the product more affordable?MY:Yes, we put the product into smaller more affordable packaging.

PML: Where do you see the roles of, smaller, medium size companies who are able to listen to their consumers but perhaps don’t have to same resources as a larger company?MY: I think there’s a role for both. If you really step back, looking at the role of digital and big data in the research I have done: I have come up with two basic approaches. One is to be outrageously customer-centric. And a small start-up tends to do this a lot easier than a big company, however larger companies are beginning to do this too. Outrageous customer-centricity is the focus of strategy, but the paradigm for the organisation isn’t hierarchy or ‘let’s do everything internally’, it’s ‘let’s network’, ‘let’s get our innovation from anywhere we can get it’. Thus increasingly you’ll find a lot of small companies providing innovation for the bigger ones, and the biggest ones providing a hub for the smaller companies; it becomes quite a positive loop. That is one way a smaller company can take advantage of this changing environment, similarly with the larger companies they can look at what the smaller companies are doing. So, the more you think about your network as an open system instead of a closed one, the better off you will be regardless of size.

PML: That’s an interesting prospective as our fellow director, Graham Thomas, mentioned a similar model in terms of IORMA, because through IORMA we’ve large organisations that we are engaging with, but also many of our associates are individual consultants that have got that wealth of experience of smaller companies. And IORMA brings the two together.MY: Yes I agree with that. That is one of the reasons I am so involved in IORMA, I would just say that sometimes there are too many networks. I did some research on how networks actually work, and we all belonged to at least one of the social networks. Every network has a purpose, so knowing what you’re trying to do with your network is key. Networking with no purpose is nonsense.

PML: IORMA provides both consumer and industry research through its global consultants. As one of these consultants, how do you think businesses coming to IORMA can utilize our consultants best to add value to their enterprise…and rapidly given that quarterly targets are always the immediate pressing concern?MY:I think there are two or three ways. As IORMA grows it can become a centre for research and understanding in everything that is going on in this Omni-channel world, a world which can be confusing. Simply to find out what is going on is cause enough to become part of IORMA. Second it’s about the various people involved. We have an enormous amount of expertise in many different areas. My third point is asking the right question. It is such an important thing for people to ask the right questions of the consultants so that they really gain an understanding of the customer, and IORMA can help with framing these questions.

PML: Millennials are lauded by all the marketing experts as a segment that actively chooses ethical and efficient companies, a sector that simply won’t buy from a seller that they find clunky or non-principled. In reality I think Millennials are just in the same position as the rest of us – struggling to get through their daily lives and up against exactly the same hurdles. What is your perception of this younger demographic versus other age groups?MY: I think with the way that technology has developed now (although it’s probably true that younger people have a bit of an edge over older people) frankly nobody likes a clunky website and nobody likes bad customer service. Everybody, at least in the developed world, has done research online first before they go and purchase something. And if you look at the way the Allibaba group is growing in China: it’s now close to being the world’s biggest online shopping mall and that is used by young and old alike; so I think it’s a question of education. I think millennials are more discerning, now they are getting more like the older generation. I’ve got grand-children who when they come into my house, the first thing they ask is ‘why am I not connected?’ She assumes she can swipe everything and doesn’t need a keyboard.

PML: Still on the subject of younger people, what messages do you try to communicate to your students at Leeds University… what is the one thing they should know before leaving academia?MY: I know this is going to sound funny, but I’d like them to be a bit more curious. It’s a mistake to assume that younger people are more interested than older people. I think people are curious through their lives and I think there is a great opportunity at university to help people become a bit more curious and I wish, somehow, us academics could get that across a little more.

PML: Well I’m curious about one area of your website. Tell us about ‘big data, social media and wine’?MY: That was me trying to engage with my students using the example of British wine, how could we use data and insight to do a better job of marketing wine. To step back from it a little bit, I’d like to cross out the word ‘big’ in ‘Big Data’ it’s big because the is a lot of it, but to be honest, machines these days can cope with a lot, so that’s not really the problem. To me it becomes big when it’s a combination of big data in a structured format (like a big spreadsheet) and combines with social voice and ‘image’ conversations, which is not structured. When you put those two things together you get something quite special. You could look at my clothing records and see I buy a lot of shirts; but if you looked at my Facebook pictures you would see that I rarely wear yellow, so getting me to by a yellow shirt isn’t going to be productive. If you truly understood me as a customer you would know that I am a blue and green person. My point being, if you combine these different types of data, then you get truly big data and then you get real insight.

Now let’s apply it; so what do we know about wine? We know where it is brought, we can see that some of the websites are boring and clunky, and there isn’t really any social presence. So we should see how to apply both areas of big data to this.

PML: So when scanning social media sights to find out consumer preferences and brand preferences, how would you find the key words, or know how to ask the right questions to get to those keywords, or data?MY: You are looking for keywords or patterns, I’ll give you an extreme example: I did work for a for a large car hire firm and they were putting in a new CRM system and I made the point that it really wasn’t going to help someone like me because every time I fly to America, chances are I will be given a Chevy or an SUV, but back in the UK I drive a sports car. So when I show up I have no idea what kind of car I will find at the airport. I asked “what do you know about my preferences other than seeing what I hired before” The CEO said, “You just need to tell us that you drive a sports car and occasionally we will provide you with one.” I explained that I shouldn’t have to tell you, just a glance at my Facebook page and you wouldn’t see a single Chevy or SUV. Your job is to actually find out what I really like and to be able to delight me! Secondly, how is the CRM system connected to the system at the airport, so the field staff can get a notification that I am arriving and that I normally get an SUV, but I am a sports car fan and it just so happens you have a Mustang over in the corner, why don’t you surprise me and give me one? The point is that you’ve got to join your systems up, so your staff can have the power to make decisions to delight the customer.

PML: And this concept is so difficult for companies to get their heads around – to make it happen!MY: There is a concept I have been developing called Customer Leadership. The idea is that data, once analysed, and after asking the right kinds of questions and getting the right kinds of answers, you first figure out how you can improve your customer experience, and engagement. Then nine out of ten times the REAL issue will be getting your organisation to do something with it, to change the way they do business around the customer. That needs the right kind of leadership. This is essential for driving a customer driven company.

The other side of the Customer Leadership concept is that we all carry now in our heads the idea of a brand. Everything is some kind of brand. I think you need to bring a brand paradigm to the issue, listening and understanding customers and changing the brand too – making sure you use the brand paradigm to be in a positive reinforcement with your customers.

PML: Indeed it requires much agility and going back to analysing individual Facebook pages to understand their customers, with a company having thousands of customers, how would you suggest managing this efficiently?MY: Anytime you sign onto a website and you access it through Facebook, or share something on Facebook, you’re allowing that site access to your basic Facebook information; they get your profile through the API. You can get a lot from that basic information and then you can look at that certain demographic and find a pattern.

PML: Some database businesses can access enormous amounts of public information about say an UHNW individual to the extent of selling information such as where someone sends their kids to school or which golf club they attend, so they can use this to forge important business relationships; is this going too far!?MY:Yes in that sense it is quite scary, and though I am both a big user and supporter of social media, and the media does hype it up, we still need to have our information protected in certain areas.

PML: Can you summarise all this advice by trying to encapsulate where companies are going wrong today?MY: I can give you two reasons. The first is people think that data analytics will solve all their problems. Asking the right question and understanding what you need will solve your problem. Secondly the customer really is in charge of things these days, too many companies ignore that fact.